By endowing
the European Union (EU) with enhanced central fiscal
capacity, Next Generation EU (NGEU) marks an important shift in supranational
economic policy. The EU has evolved from intergovernmental coordination and fiscal surveillance of Member States, to disposing of a more robust,
autonomous, and effective instrument for intervention in the
EU economy. These improvements derive from some notable innovations NGEU brings
about. However, this instrument also holds several shortcomings usually
associated with the EU budget, namely regarding the nature of funding, the type
of expenditure, and the overly intergovernmental legislative process.
Accordingly, NGEU is described as a bridge between past and future. The paper
analyses each of these issues by looking at the United States of America (US)
experience and finds that the parallelism that is possible
to draw in the different matters is substantial and could
serve as a useful inspiration for the EU going forward. Lastly, the financial component of the Draghi report on the future of
European competitiveness is also addressed, as it suggests that this recent
experience may be a useful blueprint for the future of EU finances.